reply to post by charles1952
Okay let me try to explain using simple numbers. To make numbers easy, let's say federal tax for any business that pays minimum wage is 30% and their
labor pay is around 20%. Basically what I am suggesting is that their federal tax could be 25%, and their labor could 25%, as well. That's a 25%
increase in money that could be allocated towards paying workers.
I realize the government isn't too keen on giving tax breaks, and I know that they currently aren't doing what's best for the economy on many levels,
but wouldn't this help the economy? Giving people more money to spend, giving the working class more money that is taxed itself.
You did mention that the raises in pay would be taxed, and that's part of the general idea. The average person would be earning more money, the
average person would be paying more taxes, but earning a decent amount more, thus spending more money, which we know that spending = taxes.
The general idea is that companies are not hurt, and encouraged to give the lowest earners raises, and that because of those raises the government
will in turn see a lot of what they gave as a tax break through the spending that those people do, plus the taxing of those people ( which is already
done, the people would just be making more, now )
Another point to be made is that a lot of people that do make minimum wage are given things like food stamps. With a pay raise, it might be possible
to take these people off of those food stamps.
Overall I just think that the businesses would be happy for these tax cuts, being able to allocate the money to employees, the people will be happy
because they are earning more money and aren't struggling as bad, and the fed can cut back on things like food stamps, and will end up seeing a good
portion of this money regardless.
Edit - The math done. Only using easy numbers, maybe not real ones. Let's put the wage of 10 workers at 10 dollars an hour, 40 hours a week. $4000
dollars a week right now going to workers, let's put the workers federal tax at 20%, so $800 of that to taxes, based on labor being 20%, the business
makes $20,000 a week, and we've said that 30% of that goes to federal taxes, so as of now $6,000 from the business earnings and 800 from employees
making a total of $6,800 dollars towards federal taxes a week from this employer, and it's employees.
Let's change up the numbers like I've said.. The workers now get a total of 25% of the money, thus 5,000 dollars a week are going to these 10 workers,
they now get paid 12.50 an hour, and 20% of that 5,000 dollars is now 1,000 dollars going toward federal taxes from the workers, and 5,000 from
business so $6,000 is now going to federal tax instead of $6,800
Based on this example, you might at first call this an 11.8% loss on federal taxes, but if we can assume 3 of these people qualify for food stamps,
and get say 300 a month, that's 900 dollars, which actually gives the fed a surplus of $100.
These people losing their food stamps would not be hurting, though, as they are getting 400 dollars more a month in wages - or rather very close to
that 300 after taxes and such.
I realize I assume things, but the general idea/hope is that the government wouldn't end up hurting too bad, either, so this could be something they
would look more into.
edit on 19-7-2013 by deadlyhope because: Adding details